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Monthly Archives: June 2020

How does the insurance industry sell their way through The Next Great Recession?

At the beginning of the COVID-19 pandemic, financial analysts predicted the Canadian Property & Casualty industry would be able to manage through the crisis in the short term. But in the medium- to long-term, they warned, the industry’s financial situation would get more difficult.

The Canadian economy will re-open in fits and starts while we wait for the vaccine to be developed. This new economic reality will make insurance a tough sell over the next year or two.

But not everything is lost. What do GE, Disney, HP and Microsoft have in common? They were all startups during steep declines in the U.S. economy. Entrepreneurial insurance companies and brokers should seek opportunities in those sectors of the Canadian economy that they expect to start up, bounce back quickly, or even thrive after the business lockdowns. In short, the secret to selling during this crisis may involve identifying pandemic-proof economic sectors that can generate at least some premium growth while the virus runs its course through the Canadian economy.


Is insurance a commodity?

The commoditization (or commercialization) of products means consumers are no longer distinguishing differences in brands, regardless of who made them.

Given the product variations and efforts on market and service differentiation, it isn’t easy to define insurance products as commodities. However, carriers have freedom in their ratings, market experiences, and services to truly differentiate (or distinguish themselves) from others.

Certain insurers often struggle to differentiate their products, given that industry regulators and market conditions force them to offer similar coverages and definitions.

By designing intuitive products, adding risk appetite options to the buying process, and using online platforms to support self-education and product awareness, insurers could design digital offerings that ensure clients purchase the right insurance.

Another option to consider is the Hybrid digital model, which would help guide user experiences and educate customers, while engaging advisors to ensure purchasing success.

To find out how this may affect your coverage, contact your insurance agent or broker.